Insiders Of China Wantian Holdings Retain HK$6.0m Of Investment Selling At Higher Prices

While China Wantian Holdings Limited (HKG:1854) shareholders have had a good week with the stock up 11%, they shouldn't let their guards down. In spite of the relatively cheap prices, insiders made the decision to sell HK$6.0m worth of stock in the last 12 months. This could be a warning indicator of vulnerabilities in the future.

Although we don't think shareholders should simply follow insider transactions, we do think it is perfectly logical to keep tabs on what insiders are doing.

View our latest analysis for China Wantian Holdings

The Last 12 Months Of Insider Transactions At China Wantian Holdings

Over the last year, we can see that the biggest insider sale was by the insider, Ping Man Kwong, for HK$6.0m worth of shares, at about HK$0.65 per share. So it's clear an insider wanted to take some cash off the table, even below the current price of HK$1.25. As a general rule we consider it to be discouraging when insiders are selling below the current price, because it suggests they were happy with a lower valuation. Please do note, however, that sellers may have a variety of reasons for selling, so we don't know for sure what they think of the stock price. It is worth noting that this sale was only 14% of Ping Man Kwong's holding. Ping Man Kwong was the only individual insider to sell shares in the last twelve months.

You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!

If you like to buy stocks that insiders are buying, rather than selling, then you might just love this free list of companies. (Hint: Most of them are flying under the radar).

Insider Ownership

Many investors like to check how much of a company is owned by insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. China Wantian Holdings insiders own about HK$411m worth of shares. That equates to 17% of the company. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.

So What Do The China Wantian Holdings Insider Transactions Indicate?

The fact that there have been no China Wantian Holdings insider transactions recently certainly doesn't bother us. It's great to see high levels of insider ownership, but looking back over the last year, we don't gain confidence from the China Wantian Holdings insiders selling. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing China Wantian Holdings. To help with this, we've discovered 2 warning signs (1 doesn't sit too well with us!) that you ought to be aware of before buying any shares in China Wantian Holdings.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.

For the purposes of this article, insiders are those individuals who report their transactions to the relevant regulatory body. We currently account for open market transactions and private dispositions of direct interests only, but not derivative transactions or indirect interests.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com